Providing repairs and spare parts for refrigerated containers, IRS International alleges Containerco (NZL) and Qube Logistics breached the Commerce Act, acting as a cartel jointly increasing charges for access to their depots.
IRS International claims their anti-competitive behaviour is a ploy to drive up its costs, forcing it out of the local market. IRS operates in New Zealand as a branch of Japanese-based Daikin Industries.
The High Court was told IRS holds contracts with international shipping lines for the inspection and maintenance of refrigerated containers, known in the industry as reefers.
In the past, IRS was allowed free access to Containerco’s and Qube’s portside depots to service reefers.
Containerco and Qube also service containers, in competition with IRS International.
This pattern of free access changed in 2018 with access fees charged IRS per container serviced. This fee was justified as recovery of increased health and safety costs in supervising contractors on site.
IRS reluctantly agreed to pay; increased work-related deaths and injuries at New Zealand ports had seen greater awareness of safety issues.
IRS now objects to new substantial increases in access fees.
Evidence was given that Containerco’s fees doubled in early 2024; Qube following months later with a four-fold increase, matching Containerco’s new price.
IRS sued after threats to deny access if these increased charges are not paid.
It alleges the two were party to an arrangement or understanding in breach of the Commerce Act, intended to price it out of the market.
At a preliminary High Court hearing, Containerco and Qube asked that IRS be required to front up with security for unpaid increased fees, pending a full court hearing.
IRS said it is willing to continue paying the previous rates for access.
Justice Moore ruled security is not required.
IRS has the financial resources to later pay accumulated arrears of increased charges should its legal claim fail, he said.
Evidence was given that IRS’ revenue from New Zealand operations topped eighteen million dollars for the 2023/2024 financial year, generating a net profit of some $860,000.
Whether Containerco and Qube jointly acted in breach of the Commerce Act has yet to be decided. Meanwhile, both have agreed to allow IRS ongoing access to their depots.
Separately, IRS claims the new fees amount to unconscionable conduct in breach of the Fair Trading Act.
IRS International Pty Ltd v. Containerco (NZL) Ltd & Qube Logistics Ltd – High Court (13.08.24)
24.192